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Home >> Business
UPDATED: 08:29, January 29, 2007
All misused fund money 'recovered'
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Mayor Han Zheng said yesterday that all the money that was siphoned off from the city's social security fund for illicit loans and investments has been recovered.

"Thanks to our meticulous efforts and the joint work of all parties concerned, especially the newly-established municipal work group to recover social security funds, we have reclaimed in full the misappropriated funds," Han announced in his government work report at the opening of the annual Shanghai Municipal People's Congress.

He did not reveal the amount of the money recovered but the Xinhua News Agency website put the figure at 3.7 billion yuan ($474 million) yesterday.

Investigators found the money had been illegally loaned by a company of the municipal labor and social security bureau to Shanghai Feidian Investment Development Co Ltd, a company controlled by business tycoon Zhang Rongkun, ranked No 16 on the Forbes China Rich List in 2005.

Zhang was the first person arrested in the scandal, which also brought down Shanghai's former Party chief Chen Liangyu. Chen, 59, is the highest level Party official to be axed in more than a decade.

Shanghai set up a work panel to help central government investigators trace the misappropriated funds, said Han, also acting secretary of the Shanghai Municipal Committee of the Communist Party of China.

He said the city has a lesson to learn from the pension scandal. "It revealed systemic defects and management loopholes. We must take the problems seriously, draw a lesson and improve our work."

He said the municipal government has given top priority to the fight against corruption, tightened supervision of officials and improved transparency.

"We have to closely follow established rules and procedures and check power abuse to prevent a recurrence of such scandals," said Han.

The Shanghai scandal, which unfolded in September, also involved former national top statistician Qiu Xiaohua and dozens of city officials and business people.

In November 2006, Shanghai released a guideline on the city's pension fund management which stipulates that any government department or company involved in the fund must make its balance sheet available for public supervision.

Also, a commission is being established to supervise the operation of the 10 billion yuan ($1.28 billion) pension fund.

"The investigation of Chen Liangyu demonstrates the Party's determination to fight corruption," Han said.

Other officials under investigation include Wu Hongmei, former deputy director of the Shanghai branch of the State-owned Assets Supervision and Administration Commission, and Zhu Wenjin, a deputy division head of the Shanghai Municipal Housing, Land and Resource Administration.

Xinhua contributed to the story

Source: China Daily

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